Kingfisher Airline shares drop on licence suspension

Shares in Kingfisher Airline, controlled by entrepreneur Vijay Mallya, dropped
4.8pc on Monday after the Indian regulator suspended its licence, forcing
the debt-laden carrier to stop taking bookings.

Vijay Mallya has insisted he would not turn his back on Kingfisher Airlines despite its recent woesPhoto: AP

By Telegraph Staff and agencies

9:34AM BST 22 Oct 2012

The suspension was given on Saturday after it failed to address the Directorate General of Civil Aviation (DGCA) concerns about its operations.

Kingfisher Airline is seven months behind on salary payments among other missed bills and its fleet has been grounded since the start of the month when a staff protest turned violent.

The airline, which has not made a profit since being founded in 2004 and has $1.4bn of debt, will have its licence reinstated if it provides a plan that satisfies the DGCA.

A complete cancellation of the licence was unlikely, an unnamed government source told Reuters.

Kingfisher said in a statement: "The actual position is not changed because of this order. We have, in any case, always maintained that once the issues with the employees are resolved, we will first present our resumption plan to DGCA for review, before resuming operations".